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Gofman v. Dell’Aquila

A-2406-06T1 (N.J. Super. App. Div. 2008) (Unpublished)

CONTRACTS; RIGHT OF FIRST REFUSAL — An owner is not compelled to sell a property just because an event triggering a right of first refusal occurs because a right of first refusal is not a purchase option.

Buyers of real property purchased a lot. The deed contained an additional written agreement that the sellers would extend the buyers a right of first refusal (ROFR) in connection with the sale of an adjoining vacant lot. Upon receiving an offer from a third party to purchase the vacant lot, the sellers advised the buyers of the offer. The sellers subsequently rejected the third party offer. Nonetheless, the buyers attempted to exercise the ROFR. The seller refused to proceed, and the buyers sued, seeking a declaratory judgment requiring the sellers to sell the vacant lot to them pursuant to the ROFR. It also alleged breach of the contract. The lower court granted summary judgment in favor of the buyers, and directed the parties to move expeditiously to complete the sale of the vacant lot to the buyers. The lower court, without citing legal authority, rejected the sellers’ argument that their acceptance of a bona fide third-party offer was necessary before the ROFR would be effective. It held that once a bona fide offer was received from a third party that caused the sellers to give notice to the buyers, revocation by the sellers was no longer a valid option. The sellers appealed.

The Appellate Division reversed, finding that an ROFR does not compel an owner of property just because an event triggering the ROFR occurs. It found that the ROFR did not obligate the seller to sell the vacant lot to the buyer upon the sellers’ receipt of a bona fide offer. It noted that the plain language of the contract, as well as the intent of the parties, demonstrated that the parties agreed to an ROFR, rather than a purchase option. The Court held that this type of language evidenced a ROFR rather than an option, and that the discussions between the parties dealt with the buyers’ right to purchase the property only after an acceptable offer was received.

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